Moody’s gives Belize B3 rating, says outlook stable

According to Moody’s, the key drivers to Belize’s forecasted stability have been a “forceful fiscal adjustment” enacted in 2017/18 and 2018/19, supporting debt sustainability along with decreased fiscal pressure, though it added that lingering credit challenges including structurally low growth and vulnerability to climate shocks. 

 

Moody’s also said: “The stable outlook reflects the balanced risks to Belize’s credit profile at the B3 rating level. The risk of a subsequent credit event remains low over the next 12 to 18 months given the government’s more favorable debt repayment schedule. However, fiscal and economic challenges are likely to persist and we believe that, despite the liquidity relief provided by the debt restructuring, there is a low likelihood that upward pressure on Belize’s creditworthiness will develop.”

 

Moody’s says public debt stabilized at the ned of 2017 at 95.4% and says fiscal performance remained strong in fiscal year 2018/19 as the budget aimed to raise the primary surplus to 2%. Moody’s says GOB has done this by expanding revenue measures by further reducing exemptions, broadening GST and continuing to increase fuel surcharges. Moody’s predicts that by the end of the fiscal year, public debt will decrease marginally to around 94%.

 

Moody’s projects economic growth in Belize will gradually ease to 2.4% in 2019, 2.0% in 2020, and 1.7% over the medium-term. “This dynamism will support continued reductions in the sovereign’s debt burden in 2019 and beyond, barring any unforeseen shocks,” the report said.